The significant cut in funds for the Casa Verde e Amarela program in 2023 will freeze the works of 140,000 affordable housing units in a scenario in which the country still experiences a high housing deficit.
Brazil has a deficiency of 5.9 million homes, according to the João Pinheiro Foundation’s diagnosis for 2019, the most recent available. In this universe, there are about 1.5 million precarious homes, which include those improvised in tents or viaducts and those classified as rustic dwellings (without plaster or wattle and daub).
President Jair Bolsonaro (PL) sent the 2023 Budget proposal with a reserve of just BRL 34.2 million to the FAR (Residential Arranging Fund), which finances the construction of new government-subsidized homes — a modality aimed at families. with income of up to R$ 2,400.
The figure is 95.3% lower than initially estimated for this year and represents the almost total strangulation of a program that had already been languishing with reductions suffered year after year.
While it only applies to 2023, the scissor has an immediate impact. With no guarantee of resources for next year, the MDR (Ministry of Regional Development) is prevented from resuming 15,000 stopped works that were in the portfolio’s schedule to restart until December.
Active construction sites can continue to operate with this year’s budget, but as of January, 125,000 works must be suspended, if the resource reserve is not reviewed during the Budget vote.
Sought, the MDR reported that the necessary resources were requested from the Ministry of Economy, to which it forwarded questions about the proposed final value. The Economy did not manifest itself until the publication of this text.
The Casa Verde Amarela program succeeded Minha Casa, Minha Vida, a showcase for PT administrations. The Bolsonaro government changed its name in an attempt to stamp a social mark on this front, but it struggled to boost it in the face of fiscal tightening.
The policy ended up advancing much more in the area of financed housing, with interest cuts and the redistribution of subsidies to the most needy regions. But this arm of the program only covers part of the families, since not all of them are able to afford a property payment.
“The deficit in Brazil is concentrated in the lowest income brackets. Almost 80% of homeless families earn less than two minimum wages [R$ 2.424] and depend on subsidized housing. They don’t have the capacity to obtain financing”, says Evaniza Rodrigues, a UNMP (National Union for Popular Housing) activist who has been meeting with groups waiting for the completion of the works.
“It is a tragedy for the homeless people. This means that families who do not have access to credit, who cannot afford rent, will live with another family or in squatters and slums, in precariousness”, he adds.
The most current data on the housing deficit is prior to the Covid-19 pandemic, which worsened the situation of many families due to the loss of jobs and income. Investment and management firm TCP Partners last year released an estimate that the health crisis may have boosted homelessness to 6.1 million.
In addition to precarious households, the deficit also includes cohabitation (more than one family living in the same household) and the excessive burden of rent (families that allocate more than 30% of their income to this expense).
The construction sector expected an amount of R$ 780 million for the program next year, close to the amount initially reserved for 2022. The size of the cut scared the companies and brought insecurity.
“This is crazy, because [o governo] hire and [a empresa] will deliver up front. And the people who are building now have already suffered from increased costs, they are having to absorb costs to fulfill the contract”, criticizes the president of Cbic (Brazilian Chamber of the Construction Industry), José Carlos Martins.
According to him, the interruption of the works has the potential to increase the losses of construction companies, as they buy materials and inputs in large quantities, often in sufficient volume for the entire work, to be able to bargain prices. The interruption of contracts can generate an imbalance in the cash flow of these ventures.
“These are works that were resumed after a period of non-payment. This insecurity is very harmful”, says Martins.
The cut in the Casa Verde e Amarela program is a consequence of the smaller space for discretionary expenses in the 2023 Budget proposal. These expenses support the functioning of the public machine and fund investments, such as the construction of houses.
In the opposite direction, the government stamped R$ 19.4 billion for the rapporteur’s amendments, used as a bargaining chip in negotiations with the National Congress and which usually favor allies of the Planalto Palace. Bolsonaro could have vetoed the LDO (Budget Guidelines Law) device that obliges the constitution of this reserve, but he decided to sanction it to avoid alienating politicians from the center.
Technicians from the economic team argue that deputies and senators can use the amendments to unburden areas compromised by the cuts. But the experience of recent years shows that parliamentarians awarded the money tend to direct it to actions in their electoral strongholds.
The construction sector must mobilize to try to expand the budget for the housing program, through amendments or other instruments. “It is not possible that they do not have the sensitivity to recompose”, says Martins.
Even if the onslaught is successful, the back-and-forth of resources is detrimental to housing policy planning, says Evaniza Rodrigues.
Far from the big announcements of hiring new units in the PT era, the budget for building houses has been dwindling since 2016.
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